This invention relates to a method and system for managing appeals, more particularly, this invention relates to a method and system for managing managed care denials for healthcare providers.
With the advent of managed care, hospitals and other healthcare providers (collectively referred to herein as the “healthcare provider”) often have payments for claims denied by health insurance companies for a variety of reasons. Generally, when a healthcare provider's claims are denied, the healthcare provider has the ability to appeal the denial to the health insurance company that issued the denial. Upon receipt of a written appeal or grievance, the insurance company or an insurance plan administer must review the appeal and make a decision regarding its approval or denial.
One example is medical insurance coverage plans. State and federal laws, as well as contractual provisions, allow both those insured (consumers) and healthcare providers (doctors, dentists, hospitals, medical clinics, etc.) the right to file appeals with the insurance companies when the insurer has denied a request or benefit. A consumer appeal arises when a request for approval to receive medical treatment is denied or a claim is not paid correctly. A healthcare provider may file an appeal on behalf itself or the patient when an insurer has not properly paid for a particular service rendered. Upon receipt of a written appeal, the insurer must review the appeal and make a decision regarding its approval or denial.
In a typical denial of a request for medical services, a patient and a healthcare provider determine the need for a medical service and the healthcare provider contacts the insurance company to request preauthorization for that service. After the healthcare provider has treated the patient, a claim for payment of those services is submitted to the patient's insurance company. The claim must be submitted on the appropriate claims submission form. Insurance companies require that a completed claim form be submitted with all of the requisite information, such as, patient's name and address, diagnosis, date of service, procedures or services provided utilizing standardized codes and descriptions (e.g., CPT codes), cost of service, etc.
If the claim does not meet the specified criteria of the insurer, the insurance company can deny or make only partial payment to the healthcare provider. The healthcare provider receives an explanation of payment outlining what was paid on the claim or the reasons why the claim was denied or partially paid. A description of the provider's right to appeal may be included in the correspondence from the insurance company. While the patient typically does not receive notification why a healthcare provider's request for payment for a medical service has been denied, she is often billed by the healthcare provider when the insurance company does not pay. In many instances, claims are denied because information is missing from the claim form or the insurance company has the wrong information about healthcare provider or patient.
The healthcare provider can appeal claim denial or payment reduction on behalf of the patient or itself. If the healthcare provider is appealing on behalf of a patient for a medical service request denial, the process is generally the same as an appeal lodged by the patient. For example, the healthcare provider can lodge an appeal when a confusing or incorrect explanation of benefit (“EOB”) is received from the insurance company. An EOB is typically sent to the healthcare provider by the insurer explaining the payment(s) for submitted claims. The EOB is generally coded by the insurer's claims processing system and lists the reason(s) for the claims denial or partial payment. However, these EOB codes are not standardized in the healthcare industry.
Typically, the healthcare provider initiates an appeal by contacting the claims department of the appropriate insurance company. Generally, the healthcare provider has the right to appeal if and when: the appeal is on behalf of the patient for any reason; the insurer has denied the patient coverage for a service based on medical necessity; and a medical service claim payment has been denied, partially denied and/or paid incorrectly.
Patients generally submit a health insurance appeal for denial of a request for a medical service or claims payment. Once the patient and healthcare provider determine the need for a medical service, the healthcare provider contacts the insurer to request pre-authorization for that service. Upon receipt, the insurer initiates a pre-certification review to determine if the medical service request will be approved. The insurance company must send notification of any denial to the patient and the requesting healthcare provider and informs the patient that she has the right to appeal the decision. The insurer is required by law to outline the appeal process.
One of the most common reasons a medical service request is denied is because the insurer concludes that the medical service request is “not medically necessary.” This typically occurs because the healthcare provider and/or patient has not provided all of the necessary information or the treatment provided does not meet the insurers guidelines. Most insurers utilize nationally recognized standards of medical care and criteria to guide their medical decision-making. A medical director, who is a licensed physician, reviews all medical service request denials that are based on “medical necessity.” When a patient or healthcare provider appeals a medical service request denial and provides additional or missing information, the majority of denials are overturned and the request for service approved.
Also, appeals can be triggered when patients receive a bill from their healthcare providers, who have not received reimbursement from the insurance company for services already provided. Typically, healthcare providers are not legally or contractually permitted to bill patients for more than the co-payment or deductible. However, often correspondence from a collection agency is the first notification for patients that the insurance company has denied their healthcare providers' service claim.
The appeal determination is made and the patient and/or healthcare provider is notified of the decision. If the denial is overturned, the patient is allowed to receive the requested service(s) and/or the healthcare provider is paid. If the appeal is upheld or affirmed, the patient and/or healthcare provider is then notified of the procedures for a secondary review. Typically, the third and final level of appeal includes external reviewers.
Many businesses or industries have regulated or contractual appeals or grievance process allowing a user or a customer the opportunity to challenge the denial of a service or benefit. However, these appeals or grievance processes uniformly suffer from lack of automation and standardization. Instead, the appeal or dispute is submitted in paper form and without the benefit of standardized nomenclature or data format. Accordingly, the present invention proceeds upon the desirability of providing an automated process for managing such appeals.